Nor any particular single person. It doesn’t matter how much I dislike the person personally or politically, it’s not really all that useful to target a single person when that isn’t even going to start to address the problem.

The City of Chicago is being fiscally devoured by pension obligations run up by politicians buying votes. Even with a record $543-million property tax increase, the city’s $20-billion debt to its pension funds will continue to grow for at least a decade. Pension costs overwhelm the city’s ability to deliver any actual services, and the tax increases necessary to pay for both services and pensions predictably could drive away businesses and residents, leaving behind another Detroit.

All of this abstract accounting talk doesn’t really help people grasp the nature of the looting going on in this Democrat stronghold. If only there were a way to follow Alinsky’s Rule #13: “Pick the target, freeze it, personalize it, and polarize it.”

Wait a minute – how about Valerie Jarrett, President Obama’s supreme consigliere, and, many believe, the de facto president of the United States, while the nominal POTUS plays golf, watches televised sports, and stays current with the latest TV shows and rap music?

…..
If she lives another 20 years – not an unreasonable lifespan by any means for someone receiving top-notch medical attention – Jarrett will end up taking a million bucks in pension payments for eight years of part-time work.

Why should anyone get decades’ worth of pension payments for a few years of part-time work?

I totally agree with him.

So let’s say you boot all such people off the pension rolls (and pretend there are no lawsuits, etc. etc.)

How much of Illinois’s, or even Chicago’s, overall pension liability would be reduced?

IT’S NOTTHEFEESEITHER

This is an exercise in playing with numbers, just trying to get at how silly it is to think that bitching about the pension of a single person is useful.

Because even before I run the numbers, I know that Jarrett’s pension is going to be a teeny-tiny bit of the pension liability.

THEWATCHDOGS: Extra cost of CTA pension express: $2.7M in fees
Besides the $97 million-plus spent over 15 years to finance lucrative pensions to CTA executives and part-time board members, there are millions more in investment, actuarial and legal fees associated with the retirees’ payments.

In all, those fees have cost the publicly funded transit agency more than $2.7 million over the past decade, a Chicago Sun-Times and Better Government Association investigation has found.

The fees are on top of the pensions paid in 2014 to 19 CTA board retirees, including top White House aide Valerie Jarrett, who made $11,132 in payroll deductions into the board’s pension fund and began drawing a $35,660-a-year pension at age 50. Jarrett, now 59, has been paid more than $306,000 stemming from the nearly eight years she served as the CTA’s part-time board chair, records show.

The fees also are in addition to hefty “supplemental retirement plan” pensions being paid to CTA executives who left the agency in their late 40s and early 50s. Fifteen CTA board members and 41 of the supplemental retirees also get CTA-subsidized health care, another perk that comes out of riders’ and taxpayers’ pockets.

…..
The additional fees associated with the programs over the past decade include:

• $2.05 million to two investment management companies, United Investment Managers and Gray & Company.

I’m only giving one significant figure, because the numbers I’m going to compare are very different in magnitude.

$2.7 million in fees over a decade, which are actually $270K per year, compared against $2 billion in assets… is 1 basis point in fees. Per year. Okay, if I want to be really “nice” to the investigators here, I’ll bump it up to 2 bps. Maybe.

Go check out how much in fees you’re paying for your investment accounts. I bet it’s a hell of a lot more than 1 basis point of your accumulated assets.

Even if one compared these fees against contributions or cash flows, it’s still not large.

Yes, $2.7 million sounds like a lot, if you don’t compare it to any relevant numbers. I’m disgusted with this crap.

By the way, I wouldn’t be surprised if some plans do have outrageous fees. But single-digit basis point fees, especially when the CTA plan is only half-funded, is not something to get alarmed about.

Look for the missing $2 billion in assets, which are missing because full contributions weren’t made. Not because of hyuuuuge fees.

I’m going to make this very simple. Let’s just assume any reasonable discount rate is counterbalanced by any COLAs. I don’t know if the pension has COLAs, and I don’t care. Forget about living 20 additional years – she’s female, and life expectancy from age 59 is definitely higher than that for a woman.

Meh, this is just an estimate. I’m making choices that should overestimate her liability value. I’m going to assume she lives 40 more years.

Total impact (including the past): $300K + 40*36K = $1.7 million. Compared against the pension’s full liability of $4 billion, this is: 0.04%.

If you cut Jarrett’s pension, you reduce the CTA liability amount by a rounding error.

I’m sure that if you throw in all the executives, you might get up to some single-digit percentages. Cushy pensions for the execs is not why the CTA pension is so underfunded.

FUNTIME IS OVER

By all means, let’s boot all these people in part-time sinecures off the public pension funds.

And the pension is still only 50% funded. It will be full of people who worked full-time for the CTA, some of whom did some strenuous jobs working a full career. They were promised these pensions as part of their compensation. Most probably believe they will get these pensions paid in full.

But if you’ve got only 50% of the assets needed to pay for already accrued liabilities… where is the other 50% going to come from? And remember, the liability amount is just a point-in-time measure. That liability can keep growing every year, as the contributions continue to fall behind.

So, there can be taking it out of bondholders (if you can keep getting money from them, and then go bankrupt) and taking it out of the taxpayers. How much can be gotten before the money runs out?

It may be that those two sources don’t fill that pension hole.

Then the rank-and-file will find they will get hit, too. Because the problem was never Valerie Jarrett, per se. At least, not her pension.

It takes a long while to get to that point — consider how long Greece was able to keep things going, and Puerto Rico. Illinois does have billions of dollars to burn through before it’s really out of cash.

But as the unfunded liabilities keep growing, that’s just an indication that they will eventually be defaulted on as well as everyone else who has been promised money by Illinois.